96-223

No. 96-223

IN THE SUPREME COURT OF THE STATE OF MONTANA

1996

IN RE THE MATTER OF REID CONNELL,

Petitioner and Appellant,

vs.

STATE OF MONTANA, DEPARTMENT OF

SOCIAL AND REHABILITATION

SERVICES, CHILD SUPPORT

ENFORCEMENT DIVISION,

Respondent.

APPEAL FROM: District Court of the Fourth Judicial District,

In and for the County of Missoula,

The Honorable John S. Henson, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Richard A. Reep, Reep, Spoon & Gordon, Missoula,

Montana

For Respondent:

K. Amy Pfeifer, Department of Public Health and

Human Services, Child Support Enforcement Division,

Helena, Montana

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Submitted on Briefs: August 8, 1996

Decided: January 2, 1997

Filed:

__________________________________________

Clerk

Justice James C. Nelson delivered the Opinion of the Court.

 Reid Connell appeals from the opinion and order of the Fourth

Judicial District Court, Missoula County, affirming the decision of

an administrative law judge denying Connellþs motion to dismiss

with prejudice a child support collection action and state tax

offset action filed against him. We reverse and remand.

 We restate the issues on appeal as follows: 

 1. Has Reid Connellþs constitutional right to due process

been violated under the facts of this case?

 2. Did the District Court err in affirming the

administrative law judgeþs decision that CSEDþs actions should not

be dismissed under Rule 41(b), M.R.Civ.P., for failure to

prosecute?

 FACTUAL AND PROCEDURAL BACKGROUND

 Petitioner Reid Connell (Connell) and Norma Schlenvogt

(Schlenvogt) were first married on March 27, 1967. During the

course of their first marriage, three daughters were born in 1967,

1972 and 1974 respectively. Connell and Schlenvogt divorced on

December 24, 1975. They later remarried on June 3, 1977, but a

divorce decree was entered by default on November 14, 1977, in the

Fourth Judicial District Court, Burleigh County, North Dakota. 

Pursuant to this 1977 decree, the North Dakota District Court

awarded Schlenvogt custody of the three minor daughters, granted

Connell reasonable visitation rights and ordered Connell to pay

$550.00 per month in child support. After the dissolution,

Schlenvogt remained in North Dakota with the three daughters and

Connell continued living in Missoula, Montana. 

 For approximately two years, beginning in December 1988,

Schlenvogt and her current husband received public assistance,

including Aid to Families with Dependant Children (AFDC), from the

state of North Dakota. To receive this assistance, Schlenvogt

signed a document assigning her rights to collect child support to

the North Dakota Department of Human Services to begin child

support collection proceedings against Connell.

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 After receiving an interstate referral for the enforcement of

child support from the State of North Dakota, Montanaþs Child

Support Enforcement Division (CSED) initiated a collection action

against Connell. In February 1990, CSED served Connell with a

Notice of Intent to Withhold Income alleging that he was delinquent

in the payment of child support for his daughters and thereby began

an income withholding action against him. On June 18, 1990, the

State Auditorþs office sent Connell a notice that his 1990 state

warrant would be offset against the debt he owed CSED. After

deposing Schlenvogt on August 21, 1990, an in-person administrative

hearing was held on both matters February 15, 1991, in Missoula,

Montana.

 At the close of the hearing, the hearings officer established

a schedule for the submission of proposed findings of fact,

conclusions of law and order from the parties. Connell submitted

his proposed findings and conclusions on March 21, 1991. However,

despite applying for and receiving several extensions of time, CSED

failed to submit its proposed findings of fact, conclusions of law

and order. Furthermore, the hearings officer failed to enter a

decision.

 It was not until almost four years after the February 1991

hearing that a new administrative law judge (ALJ) took any action

to finalize this matter. On December 23, 1994, the ALJ ordered the

parties to appear at a telephone conference for the purpose of

submitting arguments and motions on the preparation of findings of

fact, explaining that the hearings officer who initially heard this

case was not available to prepare Findings of Fact, Conclusions of

Law and Order in this matter because his contract expired July 1,

1992. On January 11, 1995, a telephone conference was convened. 

During the conference, both Connell and CSED agreed that the

credibility of the witnesses was material, and, therefore, the

provisions of 2-4-622(1), MCA (1993) (providing options to

parties when a hearings officer is unavailable for decision), did

not apply. Furthermore, Connell refused to waive compliance with

this statute as allowed by 2-4-622(2), MCA (1993). Additionally,

Connell moved for default judgment against CSED in conformity with

his proposed Findings of Fact, Conclusions of Law and Order, or in

the alternative, to dismiss. 

 On July 28, 1995, following timely submission of briefs, the

ALJ denied Connellþs motions and ordered a rehearing of the matter. 

Connell petitioned the Fourth Judicial District Court for judicial

review of the ALJþs order. After accepting Connellþs petition, the

District Court affirmed the ALJþs July 28, 1995 Order. From this

judgment, Connell appeals.

 STANDARD OF REVIEW

 Our standard of review concerning a district courtþs

conclusions of law is whether the trial judgeþs interpretation of

the law is correct. Steer, Inc. v. Department of Revenue (1990),

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245 Mont. 470, 474-75, 803 P.2d 601, 603. In this case, the

District Court held that, despite a delay of 44 months, dismissal

of CSEDþs income withholding action was not a proper remedy. We

review this conclusion of law to determine whether the District

Court properly interpreted Montanaþs constitutional guarantees to

due process.

 DISCUSSION

 Has Reid Connellþs constitutional right to due process been

violated under the facts of this case?

 We hold that Connellþs right to due process under Montana

Constitution Article II, Section 17, has been violated and reverse

the District Courtþs decision to affirm the ALJþs July 28, 1995

Order. Because this issue is dispositive, we will not address the

second issue raised on appeal.

 Connell argues that the District Court erred when it held that

dismissal was not a proper remedy. Connell contends that he has a

protected liberty interest in having a final decision rendered

within the time frames established by the Montana Legislature. He

asserts that when the CSED hearings office failed to render a

decision after almost a four-year period, this lack of action

constituted an unnecessary and unreasonable delay, and, thereby,

violated his right to due process. Connell admits that he received

the requisite notice and a fair hearing, yet, he asserts that he

also has a procedural right to be free from unnecessary delay in

the final adjudication of his child support obligations. 

 Connell points out that hearings officers are required to take

official notice of federal and state law, pursuant to Rule

46.30.633(1)(a), and (b), ARM, and that specific time frames for

completion of actions are set forth under Rule 46.30.643, ARM. 

Specifically, "[i]ncome withholding actions must be completed

within 45 days after service of notice under 45 CFR 303.100." Rule

46.30.643(1), ARM. Furthermore, Connell asserts that hearings

officers must enter a final decision and order within 20 days of

the hearing pursuant to 40-5-226(7), MCA (1989). Connell argues

that CSEDþs hearings office failed to meet each and every one of

these time frames. Therefore, Connell asserts, CSED violated his

right to due process and dismissal of this action is appropriate.

 CSED responds that the timetable for informing the obligor of

the hearing decision on a Notice of Intent to Withhold Income is 45

days from the date of service of the notice under 40-5-414(6),

MCA (1989), and that no statutory time limit is set for issuing a

decision concerning the state tax offset notice under 17-4-105,

MCA (1989). CSED attributes the missed 45-day deadline to

Connellþs requests for continuance of the hearing which resulted in

the hearing being held one year after service of notice. CSED

additionally attempts to avoid responsibility for its inaction by

stating:

 Once the hearing officer was no longer empowered by the

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 CSED to render a decision, the CSED was unsure how to

 proceed in the absence of the hearing officer. 

 Eventually, after reorganization of the CSED Hearings

 Office, and the lapse of an additional thirty months, the

 new Administrative Law Judge took steps to have the

 matter finally determined. . ..

 Further, relying on authority from other jurisdictions, CSED

argues that while Rule 46.30.643(1), ARM, and 40-5-414(6), MCA

(1989), respectively require that income withholding actions must

be completed and the obligor notified of the hearing decision

within 45 days after service of notice, these time frames are

merely directory rather than mandatory. Therefore, CSED asserts

that although violation of these time frames subjects CSED to

possible federal audit penalties, it does not form a basis for

dismissal of the action or entry of default against CSED.

 We disagree. Whether the specific time frames established for

income withholding actions are directory or mandatory is a question

we find unnecessary to answer in this case and does not affect our

conclusion that CSEDþs failure to render a decision for 44 months

violated Connellþs due process guarantees under the Montana

Constitution. "Administrative agencies are not exempt from the

constitutional restraints of due process requirements." Montana

Power Co. v. Public Service Comm. (1983), 206 Mont. 359, 368, 671

P.2d 604, 609. 

 Under the protection of due process, people are granted the

opportunity to be heard "at a meaningful time and in a meaningful

manner." Montana Power Co., 671 P.2d at 609 (citing Mathews v.

Eldridge (1976), 424 U.S. 319, 333, 96 S.Ct. 893, 902, 47 L.Ed.2d

18, 32. Indeed, "due process mandates that an administrative

hearing will constitute a fair trial, conducted in accordance with

fundamental principles of fair play and applicable procedural

standards established by law." Precious Metals Assocs. v.

Commodity Futures Trading Comm'n (1st Cir. 1980), 620 F.2d 900, 910

(citation omitted). The Montana Constitution broadly guarantees

that "[n]o person shall be deprived of life, liberty, or property

without due process of law." Art. II, Sec. 17, Mont. Const. 

Moreover, Connell is guaranteed that "justice shall be administered

without . . . delay." Art II, Sec. 16, Mont. Const.

 In addition to the constitutional guarantees for prompt

disposition of administrative actions, Montana statutes and

administrative rules set forth specific time frames for expedited

administrative income withholding actions. CSED initiated an

income withholding action against Connell pursuant to the

provisions of Montanaþs Child Support Enforcement Act, 40-5-401,

et seq., MCA (1989). Rule 46.30.643(1), ARM, requires that income

withholding actions must be completed within 45 days after service

of notice and 40-5-414(6), MCA (1989), requires that the obligor

be informed of the hearing decision within the same time frame. 

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The purpose of the Child Support Enforcement Act is "to provide a

more effective and efficient way to guarantee the support of

dependent children . . .." Section 40-5-402, MCA (1989). This

stated purpose comports with the federal regulation calling for

expedited administrative or judicial processes that increase the

effectiveness and meet specified processing times concerning income

withholding actions. 45 C.F.R. 303.101 (1989).

 CSED not only missed all legally imposed time frames for

completion of this action, but it also blatantly violated all

notions of procedural fairness by failing to act for a period of 44

months after the expiration of the deadline for submitting proposed

findings of fact and conclusions of law. Moreover, CSEDþs

statement that it was "unsure how to proceed" once the original

hearings officerþs contract expired is shocking, to say the least. 

Having missed every deadline imposed upon it by law and by its own

hearings officer, CSEDþs attempt to justify its failure to do

anything because it was not sure what it should do borders on the

absurd. Litigants appearing before our State agencies in

proceedings where their property, benefits or rights are at stake

deserve better treatment than being forced to twist slowly in the

breeze because the agency not only fails to timely complete a

proceeding it commenced, but, worse, is apparently not even sure

how to go about doing so. Consequently, we conclude that CSEDþs

unreasonable delay in resolving this case, in light of the various

time frames discussed above, violated Connellþs right to due

process guaranteed by Montana Constitution Article II, Section 17. 

Montanaþs constitutional guarantee of justice without delay set

forth at Article II, Section 16 adds further support to our

conclusion on the facts here.

 Only once before have we dealt with a similarly long period of

inaction on the part of a state agency. See Klundt v. State, ex

rel., Bd. of Personnel Appeals (1986), 219 Mont. 347, 712 P.2d 776. 

While neither party in this action cited Klundt in their briefs, we

believe that it is appropriate that we acknowledge the case, in any

event. In Klundt, a worker alleged that, due to a 37-month delay,

the Board of Personnel Appeals (Board) denied him a timely hearing

and thereby violated his due process rights. We affirmed the

District Court order granting the Boardþs motion to dismiss. We

stated that, in Montana, due process requires notice and an

opportunity to be heard. Klundt, 712 P.2d at 779. Without any

further analysis, we concluded:

 In this case, the Board fulfilled the fundamental

 requirements of due process. Klundt received notice and

 was given an opportunity to be heard. The three-year

 delay is disturbing, but not fatal.

Klundt, 712 P.2d at 779.

 The facts in Klundt potentially explained the Boardþs delay in

conducting a hearing by indicating that the Board put the matter on

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hold in response to a request from Klundtþs union allegedly

instigated by Klundt himself. Additionally, Klundt did not argue

that any specific time frames were violated, but only that this

particular delay was too long. In this case, CSED only explains

that the hearings office failed to render a decision within

established time frames due to CSEDþs uncertainty and resulting

inaction. 

 It appears that Klundt was decided on its facts and does not

establish precedent one way or the other as far as the instant case

is concerned. Here, the income withholding action filed against

Connell by CSED was not timely completed because of the lack of

diligence and inaction of the responsible agency. CSED failed to

act within the time frames established by law, by administrative

rule, and by the hearings officer. Connell did nothing that would

justify the unreasonable delay at issue here--a delay which we

conclude is more than simply "disturbing." 

 In sum, failure on the part of CSEDþs hearings office to

render a decision after a lapse of 44 months constitutes undue

delay under Montana Constitution Article II, Section 16, and 

violates the due process guarantees under Montana Constitution

Article II, Section 17. CSEDþs violation of Connellþs due process

rights compels dismissal. Therefore, based on the facts of this

case, we hold that the District Court erred in affirming the ALJþs

July 28, 1995 Order denying Connellþs motion to dismiss and setting

a rehearing date. Accordingly, we hereby remand for entry of an

order dismissing with prejudice both CSEDþs income withholding

action against Connell and CSEDþs proposed tax offset action

against Connellþs 1990 state warrant.

 Reversed and remanded.

 /S/ JAMES C. NELSON

 

We Concur:

/S/ J. A. TURNAGE

/S/ KARLA M. GRAY

/S/ CHARLES E. ERDMANN 

/S/ WILLIAM E. HUNT, SR.

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